Friday, May 24, 2013

Personal thoughts on a keynote speech on social business

Last week I attended the Social Business Conference 2013 organized by the Swiss-based think tank ‘Social Business Earth’ in Lugano. The keynote speaker was none other than Muhammad Yunus, pioneer behind the microcredit movement and the idea of social business as well as Nobel Peace Prize Laureate in 2006 for his achievements in this context.

I have been told that the economics professor from Bangladesh is renowned for his vivid, inciting and authentic narrative speeches about the early days of microcredit. And indeed, Yunus first told the enthralling personal story of how it all began and how he came across the idea to grant a few dollars to a group of women in his hometown in the mid 1970s. At the center of his keynote speech were, however, a few more general arguments that sounded very familiar to me as a stakeholder theorist. Therefore, I would like to reflect on three basic thoughts raised by Yunus in this blog post, which I believe are universally valid and very much in line with the underlying aspiration of our ‘people for people’-initiative.

First, Yunus mentioned that it was a live-changing moment for these women to be able to lend money at reasonable interest rates in order to engage in income-generating activities. In this way, they became independent from loan-sharks and felt as equal business partners, respected and formally credit-worthy. According to him, their appreciation in return was the most rewarding part. This made me think; isn’t it essentially much more rewarding to make people or the natural environment a bit better off at the end of the day, rather than dedicating your time to the sole pursuit of money?

Against this background, the second central question raised by Yunus was about the purpose of business in principle. To put it simply, does society serve economy or does economy serve society? In this regard, I agree with Yunus that everyone needs to ask themselves the fundamental question of whether they want to work for a profit-maximizing company or engage in a business that is committed to solve a social or environmental issue, but like any other business is run financially sustainable. In simplified terms, the bottom line of this dilemma is the personal preference between worshiping financial enrichment versus social wealth. Having said that, attention needs to be drawn to the fact that most of the world’s population is not in a position to have this personal choice.

Finally, a crucial aspect with a look into the future is how we can promote the infiltration of the social business rationale in today’s economic system. Yunus argued that the vision should be to set up a social business sector parallel to the established, and currently transforming, capitalistic system, so that people are able to make their choice. However, I argue that the ultimate goal should be an economic system, which is based on a dual value proposition, insofar as it combines profit-seeking business with a positive impact on society and the natural environment.

Marc Moser

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